The opinion
IN THE OREGON TAX COURT
MAGISTRATE DIVISION
Property Tax
MICHAEL J. EARLY, JR., )
)
Plaintiff, ) TC-MD 240651G
)
v. )
)
JACKSON COUNTY ASSESSOR, )
)
Defendant. ) DECISION
Plaintiff appealed the disqualification of his homesite from farm use special assessment
for not meeting the nonexclusive farm use (non-EFU) zone minimum income requirements. The
homesite is located on property identified as Account 10116396 (subject property), and the tax
year at issue is 2024-25. The matter is ready for decision on the parties’ cross-motions for
summary judgment.
I. STATEMENT OF FACTS
Plaintiff’s briefing relates many details concerning the subject property’s historical
agricultural use, the process by which the area came to be surveyed, mapped, and zoned, and his
interactions with taxing authorities. (Compl, Attachment at 1-14; Ptf’s First Prehearing Br at 1-
9; Ptf’s Response & Cross-Mot Summ J at 1-46.) For purposes of deciding these motions, the
key facts are as follows.
The subject property straddles the border between two zones. (Compl, Attachment at 11.)
Much of it is zoned exclusive farm use (EFU), but the portion nearest the road is rural
residential, a non-EFU zone. (Compl, Attachment at 11; Def’s Mot Summ J, Ex A at 1.)
Plaintiff’s homesite is located within the non-EFU zoned portion. (Def’s Mot Summ J, Ex A at
1-2.)
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Defendant received Plaintiff’s annual Application for Farm-use Assessment of Land
Under Farm-use Dwellings and Wasteland on April 1, 2024. (Def’s Mot Summ J, Ex C at 1.)
That application requires a report of total farm income and total federal adjusted gross income
for the last year. (Id.) Plaintiff reported a positive federal adjusted gross income and a negative
farm income—a loss—on that application. (Id.) The amounts reported on the application differ
from the amounts reported on the 2023 Schedule F and Form 1040 filed by Plaintiff and his wife.
(Id., Ex C at 1, 4-5.)
Plaintiff and his wife reported a negative adjusted gross income on their Form 1040, and
the Schedule F showed a bigger net farm loss than the farm-use application. (Def’s Mot Summ
J, Ex C at 4-5.) Plaintiff excluded insurance proceeds from a drought disaster from his gross
farm income, but even if those proceeds were included the net after expenses would be a loss.
Id.; Compl, Attachment at 12.) The joint Form 1040 showed W-2 and pension income exceeding
Plaintiff’s gross farm income (even if insurance proceeds are included). (Id., Ex C at 4-5.)
Defendant sent Plaintiff an amended notice of his homesite’s disqualification from special
assessment on August 22, 2024, due to its “not meet[ing] minimum income requirements” for
homesites in non-EFU zones. (Compl at 19.) This appeal followed.
Plaintiff asks the court to order his homesite zoned EFU and reinstated in special
assessment. Defendant asks that its disqualification be upheld.
II. ANALYSIS
The issue in this case is whether Plaintiff’s homesite is entitled to special assessment for
the 2024-25 tax year. Plaintiff’s primary argument is a challenge to his land’s zoning that
implicates this court’s subject-matter jurisdiction. Plaintiff also disputes whether his farm met
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the minimum income requirements in one of a series of motions appended to his response brief. 1
The court addresses the income requirement issue first.
A. Minimum Income Requirement
Farm homesites are eligible for special assessment under circumstances that depend on
whether or not the homesite is located on EFU zoned land. ORS 308A.253(2),(3). 2 Homesites
need only be used in conjunction with farm use to qualify for special assessment if they are
located on EFU zoned land. ORS 308A.253(2). Non-EFU homesites must meet an additional
requirement to qualify: their farmland must be “operated as a part of a farm unit that produced
more than one-half of the adjusted gross income of the owner or owners” in the prior year.
ORS 308A.253(3).
Plaintiff argues that Defendant erred in determining he failed to meet the minimum
income requirement of ORS 308A.253(3) because the gross farm income reported on his
Schedule F exceeded the adjusted gross income reported on his joint Form 1040. He charges
Defendant with misreading the statutory requirement to produce income as a requirement to
“produce profit.” (Ptf’s Response & Cross-Mot Summ J at 42.) Effectively, Plaintiff’s argument
is that the income that a farm unit must produce to qualify a homesite is gross income, rather
than net income. 3
1
The other motions include: to join the Department of Revenue because of its role in mapping; to compel
responses from taxing authorities to an interrogatory concerning the mapping process; to sanction Defendant for its
“[f]ailure to remap properly”; and to compel a “resurvey.” (Ptf’s Response & Cross-Mot Summ J at 43-47.)
Plaintiff’s motions are derivative of his zoning claim and fail for the same reason.
2
The court’s references to the Oregon Revised Statutes (ORS) are to 2023.
3
The court notes that the phrase “farm income” is used equivocally in federal tax forms. On Schedule F,
“farm expenses” are subtracted from “farm income” to compute “net farm profit (or loss).” Individuals then transfer
the amount of their “net farm profit (or loss) to Schedule 1, where it is called “farm income (or loss).” The “farm
income (or loss) from Schedule 1 goes into the individual’s “additional income,” which is included in adjusted gross
income on Form 1040.
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However, the text of ORS 308A.253(3) does not require that the farm unit produce the
majority of the owner’s gross income, but rather “adjusted gross income.” In this, the income
requirement for non-EFU homesites differs from that for non-EFU farmland. See
ORS 308A.071(2)(a) (requiring production of “gross income” in specified amounts). While the
property tax statutes do not define “adjusted gross income,” Oregon’s personal income tax
statutes require that “the taxpayer’s federal adjusted gross income shall be as determined under
the provisions of the Internal Revenue Code.” ORS 316.013. The Internal Revenue Code (IRC),
in turn, defines “adjusted gross income” as gross income minus certain deductions, including
trade or business deductions. IRC § 62(a).
Thus, income that contributes to a homesite’s qualification for special assessment is
income net of trade or business deductions. See IRC § 62(a)(1). For a farm to “produce[]”
adjusted gross income for its owner, its income must exceed its expenses. See
ORS 308A.253(3). A farming business with expenses greater than its income would actually
reduce its owner’s adjusted gross income rather than contribute to it. That is exactly what is
reflected on Plaintiff’s joint Form 1040, where farming expenses canceled out all of his and his
wife’s W-2 and pension income.
Because Plaintiff reported a net farming loss, his farm necessarily did not produce more
than half of his adjusted gross income. That goes whether or not the drought insurance proceeds
are counted as gross farm income in 2023. His farm does not meet the minimum income
requirement for special assessment on non-EFU land. See ORS 308A.253(3).
B. Zoning and Jurisdiction
Plaintiff devotes many pages of briefing to arguing that errors in surveying, mapping, and
zoning led to his homesite being placed in a non-EFU zone, whereas in his view it should be
DECISION TC-MD 240651G 4 of 7
zoned EFU because it has been used for farming since pioneer days. He seeks a court order
changing the homesite’s zoning to EFU and thereby releasing it from the minimum income
requirements for special assessment. That requested remedy raises an issue as to this court’s
subject-matter jurisdiction.
This court has jurisdiction to hear and determine “all questions of law and fact arising
under the tax laws of this state.” ORS 305.410(1). Those include questions that “must be
resolved in order to decide taxability or the amount of tax.” Sanok v. Grimes, 294 Or 684, 697,
662 P2d 693 (1983). However, such a “precondition to taxation” does not fall within this court’s
jurisdiction “if jurisdiction to decide that precondition has been affirmatively located in another
court.” Id.; see also Hefflinger v. Dept. of Rev., __ OTR __, 2025 WL 2886054 at *2 (Or Tax
Oct 9, 2025) (slip op) (analyzing “Sanok framework” for determining jurisdiction).
Here, the subject property’s zoning potentially affects Plaintiff’s tax burden because an
EFU zone would remove the minimum income requirement that caused the homesite’s
disqualification from special assessment. See ORS 308A.253(2). Nevertheless, this court lacks
jurisdiction to change the subject property’s zoning if the legislature has affirmatively located
jurisdiction in another court. See Sanok, 294 Or at 697.
In fact, the legislature has done just that with respect to zone changes. After applying for
a zone change and seeking review of any adverse action by a hearings officer at the local level,
landowners may appeal to the Land Use Board of Appeals (LUBA). ORS 227.180(2);
ORS 215.422(2). LUBA is a statewide body under the Governor with “exclusive jurisdiction to
review any land use decision or limited land use decision of a local government, special district
or a state agency * * *.” ORS 197.825; ORS 197.810. The final orders of LUBA, in turn, are
DECISION TC-MD 240651G 5 of 7
appealable to the Court of Appeals, upon which the legislature has expressly conferred
jurisdiction. ORS 197.850(3)(a).
By affirmatively locating judicial review of zoning decisions in the Court of Appeals, the
legislature has removed it from this court’s jurisdiction. See Sanok, 294 Or at 697; see also
Broken Trail LLC v. Deschutes County Assessor, TC-MD 240418N, 2024 WL 4100302 at *2 (Or
Tax M Div, Sep 6, 2024) (holding tax court lacks jurisdiction to change zoning). The court lacks
authority to decide Plaintiff’s zoning claim.
III. CONCLUSION
This court lacks jurisdiction to change the subject property’s non-EFU zoning, and the
minimum income requirements of ORS 308A.253(3) apply. The documents on file show that
Plaintiff did not meet those requirements. There is no genuine issue of material fact, and
Defendant is entitled to prevail as a matter of law. See TCR 47 C; TCR-MD 13 B. 4 Now,
therefore,
IT IS THE DECISION OF THIS COURT that Defendant’s Motion for Summary
Judgment be granted and Plaintiff’s cross-motion be denied.
POUL F. LUNDGREN
MAGISTRATE
If you want to appeal this Decision, file a complaint in the Regular Division of
the Oregon Tax Court, by mailing to: 1163 State Street, Salem, OR 97301-2563;
or by hand delivery to: Fourth Floor, 1241 State Street, Salem, OR.
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Tax Court Rules (TCR); Tax Court Rules – Magistrate Division (TCR-MD)
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Your complaint must be submitted within 60 days after the date of this Decision
or this Decision cannot be changed. TCR-MD 19 B.
This document was signed by Magistrate Poul F. Lundgren and entered on
March 16, 2026.
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